How Roku is gearing up to take on Apple TV

Consumers are still open to set-top boxes, says Roku, and it aims to be the last standing against Apple

Roku 3 player and remote


The battle between streaming services has been getting all the attention of late, but the fight among devices that run Netflix and its competitors is about to heat up too.

Hot on the heels of the price-cut announcement by Apple on its Apple TV set-top box, Roku is beefing up its product line with search and notification features, both of which are designed to make for easier streaming.

The search function—available in the United States as of Monday and in Canada on April 13—allows users to search for movie or TV show titles, actors or directors, across participating channels (otherwise known as apps).

Searching for Morgan Freeman, for example, will turn up a list of the actor’s movies that are on Netflix, Crackle and Popcornflix, the three channels included in the search function to start with. Roku says additional channels, from the 2,000 total in the United States and 1,400 in Canada, will be added in the coming weeks.

The Saratoga, Calif.-based company is also refreshing its hardware. The top-of-the-line Roku 3, which will sell for $109, will now have a voice search button on its remote to go with its motion control function and headphone jack. The remote will also have four dedicated buttons—for Netflix, Rdio, YouTube and Google Play—for faster launching of the channels.

The new Roku 2, which will sell for $79, will now have the same, faster guts as the Roku 3, but it will come with a standard remote that doesn’t have voice search, motion control for games or a headphone jack.

The Roku 1 and Streaming Stick will stay unchanged, but all of the devices will benefit from a software update (also on Apr. 13 in Canada) that will cut their startup times in half, the company says.

Aside from searching across channels, the update will also introduce a “Feed” feature that allows users to set notifications for movies that are still in theatres. When a selected movie becomes available on any Roku channel, the user will get a notification that it’s ready to watch.

The additions come a few weeks after Apple announced it was cutting the price of its streaming devices (in Canada) to $89. The company has sold more than 25 million Apple TVs, which is considerably more than the 10 million Roku units sold.

Despite that, analysis firm Frost & Sullivan recently gave Roku the market leadership award for streaming devices. Roku devices are used more—an average of 48 hours per month each—than its competitors, the firm said.

A few years ago, it looked like streaming players might become obsolete as televisions became capable of hosting apps without the need for extra hardware. But so-called smart TVs have failed in a number of regards, especially in software, which has typically been clumsy and difficult to use.

Smart TV interfaces are getting better, but they still face a long-term disadvantage, according to Lloyd Klarke, Roku’s director of product management.

TV makers are focusing their efforts on high-end sets, which makes it difficult to manage updates and to maintain uniformity across product lines. App developers are also loath to create software for smart TVs because each manufacturer has its own different operating system.

Roku’s operating system, however, is made to work with low-powered hardware, which means it’s easy to design apps for and easier to update.

“TV manufacturers are designing for the most expensive part of the line,” Klarke says. “We’re making it for the most valuable part of the line.”

Roku sees a healthy future for streaming boxes, even if the market is likely to shake out into just a few players—itself and Apple, Klarke says.

The company is also planning to make its own smart TVs available in Canada this year under Best Buy’s Insignia brand. As with the streaming devices, Roku says the TVs will be compatible with future updates for years to come because they are low-powered and low-cost.

A Roku-branded TV from Chinese manufacturer TCL sold for just $188 (U.S.) in the United States last year, for example.